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Lease vs Buy Calculator

Compare leasing vs buying a car

Lease Wins

$6,982 cheaper

Lease Total

$17,400

Buy Total

$24,382

Savings

$6,982

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Lease Wins!

Save $6,982 by choosing to lease

Total Cost Comparison

Lease$17,400
Buy$24,382
Lease/mo

$400

Buy/mo

$573

Savings

$6,982

Mo. Diff

$173

Cumulative cost comparison over time

Frequently Asked Questions

Q

Should I lease or buy a car?

Leasing is better if: you want lower monthly payments, drive under 12,000 miles/year, want a new car every 2-3 years, and don't mind not owning. Buying is better if: you drive a lot, want to own the car, plan to keep it long-term, and want to build equity.

  • Leasing a $35,000 car typically costs $350–$450/month vs. $550–$650/month to buy
  • If you keep a car 7+ years, buying is almost always cheaper in total cost
  • Lease mileage overages cost $0.15–$0.30 per mile—track your annual driving first
  • Business owners may deduct lease payments as a business expense (consult a CPA)
Q

What are the pros and cons of leasing?

Lease pros: Lower monthly payments, always drive a new car, warranty coverage, no resale worries. Lease cons: Mileage limits, wear/tear charges, no ownership, continuous payments, early termination fees.

  • Monthly payments are 30–40% lower than buying the same car with a loan
  • Factory warranty covers nearly all repairs during a typical 36-month lease
  • Standard leases allow 10,000–12,000 miles/year—excess costs $0.15–$0.25/mile
  • Wear-and-tear charges at turn-in can run $500–$2,000 for dents, scratches, or stains
  • Early termination fees can equal the remaining payments—read the fine print
Q

What are the pros and cons of buying?

Buy pros: Ownership, no mileage limits, can customize, build equity, no payments after loan. Buy cons: Higher monthly payments, depreciation risk, maintenance costs after warranty, resale responsibility.

  • After a 60-month loan, you own the car outright and have zero monthly payments
  • A well-maintained car driven 10–12 years has the lowest overall cost of ownership
  • New cars depreciate 20–30% in the first year and 50–60% over 5 years
  • Post-warranty repairs average $500–$1,200/year for vehicles over 5 years old
  • You can sell or trade in any time—no early termination penalties
Q

How do you calculate lease vs buy?

Compare total costs: Lease = (Monthly Payment × Term) + Down Payment. Buy = (Monthly Payment × Term) + Down Payment - Resale Value. The option with lower total cost is typically better financially, but consider your driving habits and preferences.

  • Include sales tax, registration, and fees in both scenarios for an accurate comparison
  • Factor in opportunity cost—the higher buy down payment could earn 4–5% invested
  • Leasing multiple times over 10 years often costs more than buying once and keeping
  • Use the residual value (buyout price) at lease end to check if purchasing the lease car is worthwhile
FactorLease (36 mo)Buy (60 mo, sell at 60 mo)
$35K car – monthly$400$573
Down payment$3,000$5,000
Total payments$17,400$39,384
Resale credit$0–$15,000
Net cost$17,400$24,384

Example Calculations

1$35,000 Car: Lease ($400/mo, 36 mo) vs Buy (5.5%, 60 mo)

Inputs

Car Price$35,000
Lease Monthly$400
Lease Term36 months
Lease Down$3,000
Buy Down$5,000
Buy Rate5.5%
Buy Term60 months
Resale Value$15,000

Result

Better OptionLease
Lease Total Cost$17,400
Buy Total Cost$24,384
Savings$6,984
Buy Monthly Payment$573

Lease: ($400 x 36) + $3,000 = $17,400. Buy: Loan = $30,000 at 5.5% for 60 months = $573.06/mo. Total payments = ($573.06 x 60) + $5,000 = $39,384. Net cost = $39,384 - $15,000 resale = $24,384. Lease saves $6,984.

2$28,000 Car: Lease ($350/mo, 36 mo) vs Buy (6%, 48 mo, High Resale)

Inputs

Car Price$28,000
Lease Monthly$350
Lease Term36 months
Lease Down$2,000
Buy Down$4,000
Buy Rate6%
Buy Term48 months
Resale Value$16,000

Result

Better OptionLease
Lease Total Cost$14,600
Buy Total Cost$15,071
Savings$471
Buy Monthly Payment$564

Lease: ($350 x 36) + $2,000 = $14,600. Buy: Loan = $24,000 at 6% for 48 months = $563.97/mo. Total payments = ($563.97 x 48) + $4,000 = $31,071. Net = $31,071 - $16,000 = $15,071. Lease saves $471 -- a close decision where preferences matter more.

Formulas Used

Lease Total Cost

Lease Cost = (Monthly Payment x Lease Term) + Down Payment

Total cost of leasing over the lease period.

Where:

Monthly Payment= The monthly lease payment amount
Lease Term= Number of months in the lease
Down Payment= Upfront lease payment

Buy Total Cost

Buy Cost = (Monthly Payment x Loan Term) + Down Payment - Resale Value

Net cost of buying, accounting for the vehicle resale value at end of ownership.

Where:

Monthly Payment= Calculated loan payment: P x [r(1+r)^n] / [(1+r)^n - 1]
Loan Term= Number of monthly payments
Down Payment= Upfront purchase payment
Resale Value= Expected vehicle value when sold

Leasing vs Buying a Car

Leasing offers lower monthly payments but no ownership at the end.

Buying costs more monthly but you own the vehicle and can build equity.

Consider your driving habits, financial situation, and long-term plans when deciding.

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Last Updated: Mar 26, 2026

This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.

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